AUDIT AND RISK SCRUTINY COMMITTEE

Minutes of the Meeting held on Thursday,23rdNovember2017 at Worksop Town Hall

Present: CouncillorsR Carrington-Wilde (Chairman),D Challinor, G Freeman, J.M Sanger, A Simpson, M Storey, A D Tromans and C Troop.

Officers: D Hill, J. Foulger, K. Mehta and E Whittles.

Others present: R. Dunlop, Link Asset Services, (Agenda Item No.6) A. Ali, RSM (Agenda Item No. 8(a)) and J. Pressley, KPMG(Agenda Item No. 8(b)).

(Meeting commenced at 6.30pm.)

The Chair welcomed all to the meeting and read out the fire alarm/evacuation procedure. There were no members of the public or press in attendance.

22.APOLOGIES FOR ABSENCE

There were no apologies for absence.

23.DECLARATIONS OF INTEREST BY MEMBERS AND OFFICERS

(a)Members

There were no declarations of interest by members.

(b)Officers

There were no declarations of interest by officers.

24.MINUTES OF THE MEETING HELD ON 24TH AUGUST2017

RESOLVED that the Minutes of the meeting held on 24thAugust2017 be approved.

25.MINUTES FOR ACTION AND IMPLEMENTATION

(a)Carolgate Car Park, Retford

Members raised concerns/asked questions on the possibility that there is a covenant on the use of the land which was put in place by English Partnerships, which no longer exists, to prevent charging for car parking. The Committee has been informed of anecdotal evidence that some residents Retford believe this to be the case. Cllr Troop produced a copy of the deed from the Land Registry which states that there is a covenant but there was no information as to what this relates to.

(Councillor J. Sanger arrived)

In response the Head of Property and Finance explained that BDC Legal Services had not found a record of a covenant and when the Parking Order is amended the process will commence.

Members also asked questions on the car parking policy for the district and the free car park in Worksop at Prospect Hill.

RESOLVED that:

  1. The Minutes for Action be noted.
  2. Legal services investigate the site and provide a response for Members with a time line on the ownership of the Carolgate Car Park, Retford, the legal status of any covenants and what they cover.
  3. The Head of Finance and Property provide a response on the Council’s policy for car park charging.

26.OUTSTANDING MINUTES LIST

RESOLVED that the Outstanding Minutes List be received.

27.TRAINING PRESENTATION - TREASURY MANAGEMENT

The Chairman welcomed Richard Dunlop to the meeting. He provided Members with a slide show presentation on the topic of treasury management which considered: Local Government funding for housing, risk and performance, principles of a balanced budget, Investment Rules and Regulations including the CIPFA Prudential Code, CIPFA Treasury Management Code of Practice, Local Government Act 2003 Investment Guidance, LGPIH Act 2007; the Council’s Treasury Strategy Report and Member’s responsibility for the report, indebtedness ratios, Core Fund. He identified the following key issues looking forward capital financing requirement and capital spend and the commercialisation agenda. He explained the Housing Revenue Account and the ability to build more Council housing.He gave an update on current financial market issues affecting the economy - Brexit, UK Bank of England Forecasts, inflation and wage growth, employment and productivity and UK Government finances including increasing National Debt, UK interest rate forecasts and the impact of the Autumn 2017 Budget.

Members asked questions during the presentation regarding income generation, low interest rates and affordable housing.

RESOLVED that:

1. The training presentation be received.

2. Thanks be recorded to R Dunlop for the presentation.

SECTION A – ITEMS FOR DISCUSSION IN PUBLIC

Key Decisions

28. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES

(a)Budget Monitoring and Capital Programme Update Report to 30th September 2017 (Key Decision No. 651)

Members were presented with the Budget Monitoring and Capital Programme Update Report to 30th September 2017, which will be reported to Cabinet on 5th December 2017. The Finance Manager informed the Committee that the report forecast:

  • An expected overachievement in Fees and Charges income in year £0.013m which ismostly due to green waste income £0.039m, car parking income is expected to underachieve (£0.020m) due to vandalised car parking machines.
  • A budget overspendof £0.029m in year for the General Fund, with variances over £10,000 detailed in Appendix 1 of the report including:forecast savings on employee costs (£0.040m) which includes a (£0.027m) saving due to paying the fixed sum element of the Pension costs in one year and not three years,overachievement of fees and charges by (£0.0.013m), Leisure Management Trust savings (£0.225m) (transferred to earmarked reserves), rental income pressures of £0.039m due to vacant shops and industrial units, security costs for Queens Buildings of £0.012m and £0.020m due to repairs and updating of Car Park machines.
  • An underspend of (£0.005m) in the Housing Revenue Account due to saving on the fixed pension element (£0.018m) and other minor movements £0.013m. If the forecast underspend does occur, the estimated HRA balance will reduce from £1.553m to £1.357m, which is above the minimum requirement set by the Council.
  • Capital Programme to be fully expended. Members were advised that Cabinet would be asked to consider and approve proposed additions and amendments to increase the Capital Programme budget by £0.056m to £18.709m.
  • The Unallocated Capital Receipts Balance estimated to be £2.557m at 31st March 2018.
  • There were no issues to highlight in respect of Prudential Indicators and weekly investment balances.

Members asked questions or commented on the funding for the Council’s Review of Markets, increased green waste income, reasons for the reduced income from the Markets and Car Parking, progress on the Bassetlaw Sports Hub report to Cabinet and the difficulties local clubs have accessing match funding for bids, feedback on the new Worksop Town Centre signage, the deferred Community Centres report to Cabinet and clarification on the scheme and starting date for Fire Risk Assessments for Sheltered Housing Schemes.

RESOLVED that:

1.The position with regard to revenue and capital budget monitoring is noted.

2 Cabinet approves the ‘new approvals funded from capital receipts’ to the 2017/18 Capital Programme totalling £0.075m as discussed in paragraph 3.19 and detailed in Appendix 3 of this report.

3.Cabinet approves the ‘other variations’ to the 2017/18 Capital Programme totalling £0.056m as discussed in paragraph 3.19 and detailed in Appendix 3 of this report.

4.Cabinet approves the ‘re-profiling’ to the 2017/18 Capital Programme totalling £0.000m as discussed in paragraph 3.19 and detailed in Appendix 3 of this report.

5.The proposed resourcing of the Capital Programme and the level of capital receipts currently available to fund any further capital expenditure is noted (paragraphs 3.22 – 3.24).

6.Members note the quarterly update on performance against the approved Treasury Management Prudential Indicators for the period ending 30th September 2017 (Appendix 6).

7.Members note the weekly investment balances made throughout the second quarter of the financial year, in conjunction with the Security, Liquidity and Yield benchmarking data for the Council (Appendix 7).

8.Members recommend the approval of the mid-year Treasury Management Strategy and Investment Strategy Report to full Council on 14th December 2017(Appendix 8).

9.The Finance Manager provide Members with details and starting date for scheme B509 Fire Risk Assessments for Sheltered Housing Schemes.

Other Decisions

29. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES

(a)Internal Audit Progress Reports 2017/18

Members were presented with information regarding the following internal audits:

1) Follow Up of Previous Actions 2 (11.17/18)

2) Licensing (12.17/18)

3) Capital Accounting and Asset Register (16.17/18)

4) Council Tax (17.17/18)

5) NNDR (19.17/18)

C.Williams of RSM presented the report, which revealed that 38% of assignments are now complete with 19% in progress and 43% due later in the year.

For the five internal audits included in the report, 10management actions have been agreed with six classified as Medium Risk and 4 have been classified as Low Risk. Management actions were agreed in respect of all findings. Within this report, there are no ‘red’ or ‘amber’ audit reports.

The following were highlighted:

Follow Up of Previous Actions 2 – Reasonable Progress. Five medium priority actions were identified:

  • 16. 15/16 Emergency Planning and Business Continuity - Implementation of Site Evacuation Plan currently on-going
  • 16. 15/16 Emergency Planning and Business Continuity - Updating Risk Assessments – ongoing
  • 31. 15/16 Customer Services and One Stop Shop Areas – Queen’s Buildings and Retford – Formalising agreements
  • 18. 14/15 Grounds Maintenance – a plan is not in place for the documentation and inspection of trees
  • 05. 15/16 Facilities Management – An e-mail address has not been set up to access the Facilities Management Team and Caretakers.

Licensing – Positive -Substantial Assurance

Capital Accounting and Asset Register – Positive - Substantial Assurance. No findings which resulted in management actions.

Council Tax – Positive - Substantial Assurance – one medium priority identified

NNDR - Positive - Substantial Assurance – one low priority identified.

Members were informed that K. Mehta has been appointed as Corporate Finance Manager on an interim basis.

Reference was made to the Briefing Note prepared by the Head of Regeneration on the current position on Bassetlaw District Council Tree Preservation Order Register.Members raised concerns aboutthe status of the Council’s digital Tree Register, emergency Tree Preservation Orders (TPO) and the legal process of confirmation to a permanent TPO, the Council’s current legal position regarding the Register, the process for TPOs and planning applications and the vacant Tree Officer post. A further question asked about the use of the Council’s App designed to carry out tree surveys. The Chairman agreed that information on the management of TPOs and tree maintenance would be requested from Heads of Service and may be asked attend the next meeting to talk through the process.

RESOLVED that:

1.The audit reports be received and the actions taken noted.

2.The Head of Regeneration to provide a written response on the

  1. Current status of the Council’s digital Tree Register,
  2. Emergency Tree Preservation Orders (TPO) and the process of confirmation to a permanent TPO,
  3. The Council’s current legal position regarding the Register,
  4. The TPO system and approval of planning applications and
  5. The vacant Tree Officer post.

3.The Head of Neighbourhoods to provide information on the tree inspection system developed by the Council.

(b) Annual Audit Letter 2016/17

J. Pressley of KPMG presented the Annual Audit Letter for 2016/17, which provides an unqualified audit opinion for the last year’s financial accounts. Members were asked to note that the report advised that the Council

  • Has a good framework of controls in place;
  • Made available all the required working papers by the agreed date and met the expected quality standards;
  • Finance team responded promptly during the audit to requests for further information or explanation;
  • Had one audit misstatement identified. This related to the value of the Authority’s Housing Stock. The Authority used the January 2017 Bassetlaw specific house price index to estimate the value of its council housing. This indicated an 8.7% increase. This index fell markedly between January 2017 and March 2017 reducing the index to a 4.7% increase. This resulted in the value of the Authority’s council housing being overstated by £9.946m in the draft accounts. The Authority corrected this material misstatement in the final version of its 2016/17 accounts. There was no impact on the value of the funds available as a result of this correction.

The Chairman advised the meeting that in order to meet the new deadlines for the production of the Audited Accounts 2018/19, there would be an additional Extra Ordinary Meeting in 2018.

Thanks be recorded to all staff and KPMG for meeting the deadlines a month in advance to accommodate the new delivery framework.

RESOLVED that:

  1. The Annual Audit Letter for 2016/17 be noted,
  2. The report be recommended to full Council on 14th December 2017.

SECTION B – ITEMS FOR DISCUSSION IN PRIVATE

Key Decisions

None.

Other Decisions

None.

30.ANY OTHER BUSINESS WHICH THE CHAIR CONSIDERS TO BE URGENT

As there was no further business to consider, the Chair closed the meeting.

(Meeting closed at8.17pm).